To amend the Federal Election Campaign Act of 1971 to
reassert the authority of Congress to restrict spending by corporations and
labor organizations on campaigns for elections for Federal office, and for
other purposes.

1.

Short title

This Act may be cited as the
Restoring Confidence in Our Democracy
Act.

2.

Findings

Congress finds the following:

(1)

Free and open elections are a founding
principle of our republican form of government.

(2)

It is incumbent upon Congress to ensure
that elections in the United States are free of corruption and the appearance
of corruption.

(3)

The free flow of
money in politics, as exemplified by the current state of affairs, is
corrupting and will distort and disfigure our democracy.

(4)

Excessively high levels of spending on
elections is fundamentally damaging to the public perception of our government,
and threatens the fairness and integrity of our democracy.

(5)

Congress has a
constitutional duty to guarantee a republican form of government for the
States.

(6)

Spending record
sums of money on our elections threatens the continued existence of our
republican form of government.

(7)

Allowing unlimited spending on elections
means the wealthy can crowd out other important voices in our political
debates, thereby giving American citizens fewer sources of information.

(8)

Congress has the
inherent power to ensure elections for the government are conducted in a fair,
honorable, and proper way to preserve our democracy and ensure the people have
confidence in our elections and system of government.

(9)

Congress has the
authority to regulate campaign expenditures to promote integrity, prevent
corruption, and ensure the public has trust in our election system, going back
to the Tillman Act of 1907, which prohibits corporations from making direct
contributions to political campaigns.

(10)

In 1947, Congress
passed the Taft-Hartley Act, which first prohibited corporations and labor
unions from making independent expenditures in support or opposition to
candidates for Federal office.

(11)

The Watergate scandal, and the outrageous
expenditure of campaign funds in that scandal, did great damage to public
confidence in government and demanded a legislative response to restore this
confidence.

(12)

Congress enacted
the Federal Elections Campaign Act (FECA) in 1974 as a response to Watergate
and public calls for increased regulation of our campaign system. This law
established the Federal Elections Commission and instituted limits on campaign
contributions which remain law to this day.

(13)

In 1976, the
Supreme Court issued a decision in the case of Buckley v. Valeo which first
established the principle that money equals speech, in addition to overturning
FECA limitations on independent expenditures.

(14)

The Buckley
decision also stated that “The constitutional power of Congress to regulate
federal elections is well established and is not questioned by any of the
parties in this case.”.

(15)

Equating money with speech can result in
the wealthy having an undue influence on our elections at the expense of the
great majority of the American people.

(16)

In 1990, the
Supreme Court issued a decision in the case of Austin v. Michigan Chamber of
Commerce which upheld a Michigan law banning corporations from making
independent expenditures in elections.

(17)

In Austin, the
Court found that “Corporate wealth can unfairly influence elections when it is
deployed in the form of independent expenditures.”.

(18)

Austin also established that the government
has an antidistortion interest in regulating political speech. The Court held
that there is a compelling government interest in preventing “the corrosive and
distorting effects of immense aggregations of wealth that are accumulated with
the help of the corporate form and that have little or no correlation to the
public’s support for the corporation’s political ideas.”.

(19)

In 2002, Congress enacted the Bipartisan
Campaign Reform Act of 2002, which banned political parties from raising “soft
money”, among other things.

(20)

Spending in
presidential elections has risen to excessive levels over the last decade,
which threatens not only our government, but the integrity of our
elections.

(21)

In the 2000
presidential election, both candidates spent $343.1 million combined. This
number climbed to $717.9 million in the 2004 presidential election.

(22)

In the 2008
presidential election, Barack Obama’s campaign spent $740.6 million, more than
both major party candidates combined in the previous election.

(23)

Following the
Supreme Court’s decision in the case of Citizens United v. FEC, there was a
massive increase in outside political spending, which threatens to undermine
the legitimacy of our political system.

(24)

In the 2010
elections, Super PACs spent approximately $90.4 million, of which $60 million
was spent explicitly advocating for or against a candidate.

(25)

Spending among
Super PACs in 2010 was concentrated at the top. Ten Super PACs accounted for
nearly 75 percent of all Super PAC spending in 2010. Additionally, American
Crossroads spent $25.8 million in 2010 alone, accounting for 28.7 percent of
Super PAC spending in 2010.

(26)

According to the
Wall Street Journal, Super PACs have spent $152,528,662 on the 2012 election to
date.

(27)

Super PACs spent
$8.93 million during the week of June 18, 2012 alone.

(28)

Super PACs are
allowed to conceal the source of their donations, thereby avoiding transparency
and greater public scrutiny of their actions and motivations.

(29)

Six and
four-tenths percent of itemized funds raised by Super PACs since 2010 were not
able to be traced to their original sources, which decreases accountability and
transparency, threatens public confidence in our elected officials and our
elections, and has a distorting effect on our elections.

(30)

Corporations, now
freed to spend as much as they like to influence elections, contributed $31
million to Super PACs from 2010–2011, thereby helping give corporate interests
a greater voice in our political system than average Americans.

(31)

A January 2012
poll by Rasmussen says that 58 percent of Americans believe the United States
needs new campaign finance laws.

(32)

A January 2012
poll by Democracy Corps found that 55 percent of Americans oppose the Citizens
United decision. Eighty percent of voters also believe there should be limits
on the money spent in campaigns.

(33)

After considering these findings, Congress
is concerned by the unfairness of unlimited spending in elections and is taking
this action to protect our democracy and our electoral system.

(34)

Reinstating the
ban on corporate political expenditures and placing a limit on the amount of
donations to Super PACs will help restore faith and trust in our democracy and
will respond to calls by the American people for vigorous campaign finance
reform and effective laws to protect our free democratic system of
elections.

3.

Prohibition of
corporate and labor disbursements for electioneering communications

(a)

Prohibition

(1)

In
general

Section 316(b)(2) of
the Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by
inserting or for any applicable electioneering communication
before , but shall not include.

(2)

Applicable
electioneering communication

Section 316 of such Act (2 U.S.C. 441b) is
amended by adding at the end the following:

(c)

Rules relating
to electioneering communications

(1)

Applicable
electioneering communication

For purposes of this section, the term
applicable electioneering communication means an electioneering
communication (within the meaning of section 304(f)(3)) which is made by any
entity described in subsection (a) of this section or by any other person using
funds donated by an entity described in subsection (a) of this section.

(2)

Exception

Notwithstanding paragraph (1), the term
applicable electioneering communication does not include a
communication by a section 501(c)(4) organization or a political organization
(as defined in section 527(e)(1) of the Internal Revenue Code of 1986) made
under section 304(f)(2)(E) or (F) of this Act if the communication is paid for
exclusively by funds provided directly by individuals who are United States
citizens or nationals or lawfully admitted for permanent residence (as defined
in section 101(a)(20) of the Immigration and Nationality Act (8 U.S.C.
1101(a)(20))). For purposes of the preceding sentence, the term provided
directly by individuals does not include funds the source of which is an
entity described in subsection (a) of this section.

(3)

Special
operating rules

(A)

Definition under
paragraph (1)

An
electioneering communication shall be treated as made by an entity described in
subsection (a) if an entity described in subsection (a) directly or indirectly
disburses any amount for any of the costs of the communication.

(B)

Exception under
paragraph (2)

A section
501(c)(4) organization that derives amounts from business activities or
receives funds from any entity described in subsection (a) shall be considered
to have paid for any communication out of such amounts unless such organization
paid for the communication out of a segregated account to which only
individuals can contribute, as described in section 304(f)(2)(E).

(4)

Definitions and
rules

For purposes of this subsection—

(A)

the term
section 501(c)(4) organization means—

(i)

an organization described in section
501(c)(4) of the Internal Revenue Code of 1986 and exempt from taxation under
section 501(a) of such Code; or

(ii)

an organization
which has submitted an application to the Internal Revenue Service for
determination of its status as an organization described in clause (i);
and

(B)

a person shall be treated as having made a
disbursement if the person has executed a contract to make the
disbursement.

(5)

Coordination
with internal revenue code

Nothing in this subsection shall be
construed to authorize an organization exempt from taxation under section
501(a) of the Internal Revenue Code of 1986 to carry out any activity which is
prohibited under such Code.

(6)

Special rules
for targeted communications

(A)

Exception does
not apply

Paragraph (2) shall
not apply in the case of a targeted communication that is made by an
organization described in such paragraph.

(B)

Targeted
communication

For purposes of
subparagraph (A), the term targeted communication means an
electioneering communication (as defined in section 304(f)(3)) that is
distributed from a television or radio broadcast station or provider of cable
or satellite television service and, in the case of a communication which
refers to a candidate for an office other than President or Vice President, is
targeted to the relevant electorate.

(C)

Definition

For
purposes of this paragraph, a communication is targeted to the relevant
electorate if it meets the requirements described in section
304(f)(C).

.

(3)

Effective
date

The amendments made by this subsection shall take effect
immediately after the enactment of subsection (b).

(b)

Conforming
amendment

Sections 203 and 204 of the Bipartisan Campaign Reform
Act of 2002 (Public Law 107–155) are repealed, and each provision of law
amended by such sections is restored as if such sections had not been enacted
into law.

4.

Prohibition of
independent expenditures by corporations and labor organizations

Section 316(b)(2) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by striking
includes a contribution or expenditure, and inserting
includes a contribution or expenditure (including an independent
expenditure),.

5.

Application of
contribution limits and source prohibitions to contributions made to super
pacs

(a)

Application of
limits

Section 315(a) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)) is amended by adding
at the end the following new paragraph:

(9)

For purposes of the limitations
imposed by paragraphs (1)(C), (2)(C), and (3)(B) on the amount of contributions
which may be made by any person to a political committee, a contribution made
to a political committee which accepts donations or contributions that do not
comply with the contribution or source prohibitions under this Act (or made to
any account of a political committee which is established for the purpose of
accepting such donations or contributions) shall be treated in the same manner
as a contribution made to any other political committee to which such
paragraphs
apply.

.

(b)

Effective
date

The amendment made by
subsection (a) shall apply with respect to contributions made on or after the
date of the enactment of this Act.

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